The Investments and Securities Act requires the Securities and Exchange Commission (SEC) to look beyond the commercial benefits of a merger. The SEC must assess whether the transaction is likely to substantially lessen competition, eliminate an effective competitor, or create market dominance.
However, a merger may still be approved where it delivers significant technological, efficiency, or public interest benefits that outweigh any adverse competitive effects.
Business Insight: Companies considering mergers, acquisitions, or corporate restructurings should conduct a regulatory and competition assessment early in the transaction process. Identifying potential concerns before filing can significantly improve the prospects of regulatory approval and avoid costly delays.
Bottom Line: A successful merger is not judged solely by what it achieves for the parties, but also by its impact on competition, the market, and the public interest.